Oct 19, 2023
My husband has a habit of pausing TV shows right in the middle of the action to point out things about the background. “See those inset cabinets? That’s what I want one day,” he’ll say. Meanwhile, I have a “dream house” Pinterest board full of furniture and design inspiration.
As renters living in San Francisco, we had been strategizing and saving for years to buy a house in the town where we met and fell in love as teenagers (a suburb outside the city). We also knew that this area had become nearly impossible to break into for first-time homebuyers and seasoned real estate investors alike.
In 2020, we heard that an old family friend in the area was looking to sell their storybook 1927 English Tudor.
While we loved the house and its location, we weren’t quite ready to move. Still, while many buyers in this scenario might have decided to pass on this opportunity, we pounced and then spared no expense renovating the property to our tastes.
Once all the alterations were done, we did something that shocked our family and friends: We turned the keys over to renters.
As surprising as this decision might seem, we had good reason to allow strangers to be the first official tenants to make meals in our newly updated kitchen, lounge in our family room, and sleep in our bedroom.
In fact, I’d dare say that doing so was the only way we’d ever be able to afford a home in this area at all.
We didn’t want to miss our window
Since 2012, the California housing market had become one of the most overheated in the country. Median list prices had increased by 77%, outpacing local income growth three times over. Bidding wars, record-high home prices, and all-cash offers became commonplace, and we didn’t foresee that new norm cooling off anytime soon.
We recognized the cost of properties here would keep getting more expensive if we waited. We also realized that there was a strong possibility that the historically low mortgage interest rates of 2020 wouldn’t last. (Spoiler: We were right!)
Plus, since this was a pocket listing—not yet up on real estate listing sites—it eliminated the competition that would have surely come from other eager buyers and local developers who know the potential value of flipping a fixer-upper in this part of the state.
Renters cover the mortgage—and help us build home equity
Even as a pocket listing, the house wasn’t cheap, costing us $2.15 million. Believe it or not, that’s a deal in this area, where the median list price hovers at $2.7 million.
While doing the research to see if the math added up, we learned that the current rental range for the area would cover the cost of our mortgage, home insurance, and maintenance. This allowed us to just break even—and, over time, build equity while we wait our turn.
Not yet ready to swap city life for the suburbs
In addition to finances, where we’re at as a family played a big factor in our decision to forgo living in our dream home for a few years. Our son isn’t yet school-aged, and with baby No. 2 on the way, we know that welcoming a new little one into the world isn’t an ideal moment to make a big move.
The plan is to become official residents before they both enter kindergarten. When we considered how much it would cost to put two children through private school if we stayed in San Francisco—about $600,000, according to our calculations—we decided to instead invest that money into this property where the local (and free) public school is the top-rated in the area.
We also love city life and the cozy Marina-style home in San Francisco we’ve made memories in for the past dozen years. It’s our intention to truly take advantage of all the perks of urban living now that things have reopened and before we make the family shift to suburbia.
Why we didn’t cut corners on our renovation
We went forward with personal design decisions that weren’t typical for a rental. Most landlords lean toward cheaper and replaceable elements because of expected wear and tear. But this was eventually going to be our forever home.
We also felt strongly that if we didn’t do these projects now, they’d never get done before we moved in. The cost of materials was increasing due to inflation and supply chain interruptions (our marble countertop slabs got stuck in the great Suez Canal backup of 2021), so holding off would have only hit our pocketbook even harder.
It was a bit risky to stray from neutrals that tend to better attract temporary tenants, but as a couple, we’ve always embraced the mentality of “go big or go home,” so we didn’t hold back.
Must-haves for me included refinishing the hardwood floors in a herringbone pattern, carpeting the stairs with a unique antelope print runner, and wallpapering the guest bathroom with the same iconic banana leaf design as the Beverly Hills Hotel. For my husband, it was a suite of luxury kitchen appliances and—you guessed it—those custom inset cabinets.
Our real estate agent, Jennifer Gilson of Golden Gate Sotheby’s International Realty, confirms our home buying-to-leasing journey isn’t typical.
“I rarely see folks in this market splurge on their forever home, spend the money to renovate, and wait to move in,” she says. But for our story, it works.
For the record, we were in fact the first to enjoy the renovated space, as our family held a pizza party and sleepover before the renters took over. I even made it a point to take a bath in both tubs before we left. And when I think about the fact that just 3 miles down the road from our future address is the high school gym where my then-boyfriend, now-husband and I attended homecoming dances together as dates, it’s incredibly special to know we have one more homecoming coming our way—the one where we at long last move in.
Karli Mullane is an entertainment journalist and host who covers celebrity lifestyle and news.